Rulemaking Hearing Rule(s) Filing Form

Transcription

1 Department of State Division of Publications :) i 2 Rosa L. Parks Avenue, 8th Floor SnodgrassiTN Tower NRshville, TN Phone' 6'15- / Fax: ' [egister.information@tn.gov File Date: Effective Date: Rulemaking Hearing Rule(s) Filing Form Rulemaking Hearing Rules are rules filed after and as a result of a rufemaking hearing. TCA Section Agency/Board/Commission: Tennessee Motor Vehicle Commission Division: Departm~r1t ~f C.ommerce and Insurance. Contact Person: Anthony Glal}dorf Address: 500 Janles Robertson Parkway, Nashvill~,1ennessee Zip: Phone: (615) Revision Type (check all that apply): x Amendment x New Repeal Anthony.glandorf@tn.gov Rule(s) Revised (ALL chapters and rules contained in filing must be listed here. If needed, copy and paste additional tables to accommodate multiple chapters. Please enter only ONE Rule Number/Rule Title per row) :. 9~~p!er N LJ~t?~r.... ~h(lp~~rtitle General Rules Rule Number Rule Title Definitions iyyt:lr.~?r1~yg.b9t9~~9r1q?it??ir1~t?r1tiyt?f\lj.qits Q? > pe?i~ef\pplic:?ti(?q? : 1r1~Pt?9ti<?rl()f. 3~~ir1~~~R~<:;gr9? License Fees Motor Ve~ic:I~.~h9IJVs, Motor Vehicle Dealer Facilities h~p~er Number~~~p~~r...T...i..t...I...e A~~gr.!.l()~i\'~ry19~ili~y Deal..e.....r...L...i..c...e...n...s...e Rule Number Rule Title Sales Tax 10 Number Gityand Business License ~it:ll?ilityJQ?~r?r1g~..<?1J9yyg~~~(sg()rnp~rl~?!!()Q : PrimaryE?~?irlE???A<:;!iyi!y ALJt()Qlg~iy~ty1ql?ili!y q~a.i~lfacilities Reasonable Business Hours Automotive MobilityPE?a.!~rf\pplig9ti(?rl.??r19R~qLJi~~'!'~Q~? D...~rli?I) LJ p~q?i9.f.l. or Revocation of License SS-7039 (July 2010) 1 RDA 1693

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10 * If a roll-call vote was necessary, the vote by the Agency on these rulemaking hearing rules was as follows: Board Member Eddie Roberts Chairman Aye X No fabstain Stan McNabb X - r-- Absent Signature (if required) George Bass X William Tarr X Joe Cla~ton X Kevin Cullum X Ronnie Fox X Donnie Hatcher X Nate Jackson X Chad Jones X Reed Trickett X Mark Pirtle X - Farrar. Schaeffer.-- X Don Parr X [ - I certify that this is an accurate and complete copy of rulemaking hearing rules, lawfully promulgated and adopted by the commission on 06/06/2011, and is in compliance with the provisions of TCA I further certify the following: Notice of Rulemaking Hearing filed with the Department of State on: Rulemaking Hearing(s) Conducted on: (add more dates) ","'~t.& WI. "'"...'~""-. '9.. "'''' ~...."li"~,.. l 'S.. STATE ~. '\, :: Of.: ; : TENNESSEE :! ~ 0. "0 NOTARY : ~. i -., ~.t/ 0".PUBlIC 0 " ~,l. "r 0 -( ~ " Subscribed and sworn to before me on: /; - /7-- ~ 1/ 0 My CommlSSloo lxplres JULY Notary Public Signature: ~~~ii?:: ~~~:::~~r?t ~~:H :~~:~~ ~:~~~::~~~~~~~~., 'O~ " H',...',,,,,.,.',' ~,..,,\ \ My commission expires on: :J:v...L.ILf"'l' -=_,-_-"",",--_de ~ -=---:"---L I{ All rulemaking hearing rules provided for herein have been examined by the Attorney General and Reporter of the State of Tennessee and are approved as to legality pursuant to the provisions of the Administrative Procedures Act, Tennessee Code Annotated, Title 4, Chapter 5. SS-7039 (July 2010) 10 RDA 1693 Date

11 Department of State Use Only Filed with the Department of State on: ~_:_ -..:!b~/j~'_i_~' d;~ -_I_(---- Effective on: """""'~J.-{I-/:~do-=----"I-/-'...L..(---- ~~~~~~~ Secretary of State (,..., If' ("") c=> ~ -. i'v N --< :0 J:P 3 - '1 ::x: cj) 0..n~ w ~ SS-7039 (July 2010) 11 RDA 1693

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14 6. Performances standards for small businesses : There are no performance standards for small businesses as a result of these amendments and new rules. 7. Barriers or other effects that stifle entrepreneurial activity, curb innovation or increase costs: The amendment to Rule requires a net worth of ten thousand dollars ($10,000.00) for motor vehicle dealer applicants. Under T.C.A , a financial statement is required for all applicants, however, a required net worth is not established. The Commission has found that without such a requirement, applicants with little net worth were found entering the business as motor vehicle dealers but soon after were going out of business. In doing so, many of these dealers failed to provide titles to consumers. In order to protect the safety, health and welfare to the citizens of Tennessee who are purchasing motor vehicles, a minimum net worth is needed. The requirement of ten thousand dollars ($10,000.00) is found to be a low barrier of entry to provide greater assurance that consumers will be protected. Economic Impact Statement: 1. Types of small businesses directly affected: All small businesses that are motor vehicle dealers and automotive mobility dealers doing business within the State of Tennessee will be directly affected. 2. Projected reporting, recordkeeping, and other administrative costs: The amendment to Rule regarding the requirement of keeping certain records at the business location of the licensee is not expected to generate an increased cost of maintaining those records. Newly created Chapter et seq. requires the retention of certain documents, but is projected not to increase the cost of recordkeeping and administrative costs in selling of adapted vehicles to disabled or aged persons. 3. Probable effect on small businesses: The amendments to Chapter et seq. will require new small business motor vehicle dealer applicants to show a minimum net worth of ten thousand dollars ($10,000.00). Current small business motor vehicle dealers in operation will not be affected by this amendment. The amendment to Rule provides clarification of the facility requirements for a motor vehicle dealership to ensure that a licensee cannot use a common-use parking lot as their own display lot for their dealership. This amendment will not bar small businesses to obtain a motor vehicle dealer license but will ensure that selected facilities are adequate to safely hold their inventory without posing a danger to consumers. Current dealerships will not be affected by this amendment. The new rules found in Chapter et seq. regarding the creation of the automotive mobility dealer license will minimally disrupt current business operations. The majority of the future licensees under this rule are currently licensed as motor vehicle dealers. As such, their facilities are likely to be in compliance with the requirement of this new license. 4. Less burdensome, intrusive, or costly alternative methods: The proposed changes to the existing rules are minimally burdensome/intrusive to small businesses. The necessary costs to small businesses to implement the changes required by the proposed amendments and additions to the rules are offset by the protections provided to the citizens of Tennessee. 5. Comparison with federal and state counterparts: The new rules created under Chapter et seq. regarding automotive mobility dealer licenses were modeled after the Kentucky Transportation Cabinet rules found in 605 KAR 1 :031. These new rules were also compared to a similar regulatory scheme in Indiana. Under Indiana Code , an applicant for an automotive mobility dealer license is required to be a member of the National Mobility Equipment Dealers Association and adhere to the Quality Assurance Program of that organization. The Commission reviewed the Quality Assurance Program requirements and found them to be overly burdensome to the applicant and as such decided the Kentucky model was more desirable over the Indiana regulation. SS-7039 (July 2010) 14 RDA 1693

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19 Department of State For Department of State Use Only Division of Publications 312 Rosa L. Parks Avenue, 8th Floor SnodgrasslTN Tower Sequence Number: hduue Nashville, TN Rule ID(s): Phone: Fax: File Date: Effective Date: Rulemaking Hearing Rule(s) Filing Form Rulemaking Hearing Rules are rules filed after and as a result of a ru{emaking hearing. TCA Section Agency/Board/Commission: Tennessee Motor Vehicle Commission Division:. Department of Commerce and Insuran~e Contact Person: Anthony Glandorf Address: 500 James Robertson Parkway, N9shv ill ~, Tennessee Zip: Phone: (615) Anthony.glandorf@tn:90v Revision Type (check all that apply): x Amendment x New Repeal Rule(s) Revised (ALL chapters and rules contained in filing must be listed here. If needed, copy and paste additional tables to accommodate multiple chapters. Please enter only ONE Rule Number/Rule Title per row) , 9~~P~~.~~lJmber,. Ch.~p~~tT~!le General Rules Rule Number..., Rule Titl..e i Definitions J yyarranty b?ig~~?6~$~i~s l nceniiveau(iits : gecli~rf\ppli~clti()q~ InSOe(:tlcm of Business Records " Chapter Number i Chapter Title ~~~~~~~~ ~ ~ r i ~~\i~~:: ~~.. Mq~il iiy.g.~? I~rhi~.~6~.~ Sales Tax 10 Number : ~itycln~ 90LJ'!~y~.LJ~iQ~~~~icens~ Liability Insurance and Worker's Compensation r prim?fy$~~i6~~~a~tiyify L ~igq~ J\LJt<?~q~iy~~()~ilitYg~?I~t~?~ili~i~~ Reasonable Business Hours Aut9f!.1<?~i\l~ry19~ili~Y g~?i~~f\pplig?!i9,!~?q9.f3~q~i~~~~fl!~ , Su~p~fl~i9fl. gr.b~y9g?~i9qqf~i~~.,!~~ SS-7039 (July 2010) 1 RDA 1693

20 Chapter General Rules Amendments Rule Definitions is amended by adding the following paragraph, so that as amended the additional paragraph will read as follows: (8) the term "sales incentive" shall mean a payment made or other benefit provided by a manufacturer or distributor pursuant to a program to incentivize the retail sale of a vehicle or vehicles distributed by the manufacturer or distributor. Without limiting the foregoing. each of the following is an example of a Sales Incentive: (1) a payment made or a benefit provided by a manufacturer or distributor for which a buyer of a vehicle from a dealer becomes eligible as a result of purchasing a vehicle. whether the payment or benefit is given to the buyer or to another based on assignment of the right thereto by the buyer of a vehicle; (2) a payment made or benefit provided by a manufacturer or distributor to a dealer because of the dealer's sale of a vehicle; (3) a payment made or a benefit provided by a manufacturer or distributor to a dealer for a dealer's sale of multiple vehicles to meet a goal or objective of a manufacturer or distributor's program; (4) a payment made or a benefit provided by a manufacturer or distributor to a dealer for a dealer's sale of a vehicle or sales of vehicles where the amount of compensation or benefit is determined based on a dealer's sales in comparison to a goal or goals of a manufacturer or distributor's program; and/or (5) a payment made or benefit provided by a manufacturer or distributor to a dealer or the customer on account of the customer's status as an employee of the manufacturer or distributor. a relative of an employee of the manufacturer or distributor. a supplier to the manufacturer or distributor. or as a former customer of the brand. or as a payment or other benefit given to a buyer who currently owns a competing brand as an inducement to purchase a vehicle. Authority: T.C.A Rule Warranty Charges is amended by deleting the text of the rule in its entirety and by substituting instead the following language so that, as amended, the rule shall read as follows: Rule Warranty Charges and Sales Incentive Audits. (1) (a) All charges made by a motor vehicle dealer to a manufacturer, distributor, manufacturer or distributor branch, or manufacturer or distributor representative for warranty repairs or servicing shall be submitted within thirty (30) days after such repairs or servicing is completed. All such claims for warranty repairs or servicing properly submitted shall be deemed approved and shall be promptly paid, unless within sixty (60) days after such claims are received, the manufacturer, distributor, manufacturer or distributor branch, or manufacturer or distributor representative provides the submitting dealer with written notice that the claim or claims are rejected and the reason therefor~. A manufacturer, distributor, manufacturer or distributor branch, or manufacturer or distributor representative may, within twelve (12) months after the payment of a warranty claim, review its action, audit the submitting dealer's records and disallow the claim for good cause. (b) A manufacturer, distributor, manufacturer or distributor branch, or manufacturer or distributor representative may, within twelve (12) months after the payment of sales incentives, review its action, audit the submitting dealer's records and disallow the claim for good cause. In the event of a manufacturer or distributor sales incentive audit of a dealer, if it is properly determined that a dealer must reimburse a manufacturer or distributor after a full and fair audit. the dealer shall nevertheless be entitled to a reduction in the reimbursement if the dealer qualified for some different payment or benefit as a result of the sale or sales being audited. (2) Unless a motor vehicle dealer's franchise agreement with a manufacturer or distributor provides to the contrary, a motor vehicle dealer is required to retain parts replaced during warranty repairs or services for a period of thirty (30) days after the date the dealer submits a claim for warranty reimbursement to the manufacturer or distributor for the repairs or servicing in which the part or parts were replaced. Authority: T.C.A SS-7039 (July 2010) 2 RDA 1693

21 Rule Notice of Termination, Cancellation or Non-Renewal is amended by deleting the text of the rule in its entirety and by substituting instead the following language so that, as amended, the rule shall read as follows: Rule Notice of Termination, Cancellation or Non-Renewal. (1) In the event that a manufacturer, distributor, manufacturer or distributor branch or manufacturer or distributor representative determines that the franchise of an existing motor vehicle dealer should be terminated or cancelled or should not be renewed, it shall give written notice to the dealer and to the Tennessee Motor Vehicle Commission at least sixty (60) days prior to the effective date of the termination, cancellation or non-renewal. This notice shall contain a concise statement of the reasons for the termination, cancellation or non-renewal of the franchise. Upon application of the person cancelling, terminating or failing to renew a franchise and with notice to the dealer affected thereby, the Commission may permit a cancellation, termination or non-renewal of a franchise upon less than sixty (60) days notice, if it determines in writing that a lesser notice period is justified in light of the circumstances surrounding the cancellation, termination or non-renewal. (2) Failure of a manufacturer, distributor, manufacturer or distributor branch or manufacturer or distributor representative to give adequate notice pursuant to Rule (1) (1) or to keep the franchise in full force and effect pending a final determination by the Commission or to abide by the Commission's final order may result in the Commission's refusal to issue a motor vehicle dealer's license to another dealership selling the same trade name and line-make of motor vehicles as the affected dealer or doing business in the same relevant market area as the affected dealer. This remedy is in addition to any other remedy provided in T.C.A et seq. Authority: T.C.A Rule Dealer Applications is amended by deleting the text of the rule in its entirety and by substituting instead the following language so that, as amended, the rule shall read as follows: Rule Dealer Applications. ta-) ill An applicant for a license to sell tt&eg motor vehicles shall comply with T.C.A and shall provide the Commission with all information required by this section. (-9.) ill Applicants are required to provide the Commission, and keep current, the names of any inventory financers, i.e. "floor planners" used by the dealership. (c) If an applicant has not supplied all the necessary materials within one hundred twenty (120) days from the date of the request for further information by the Commission, the application shall be deemed expired. (3) A motor vehicle dealer applicant shall provide to the Commission a compiled financial statement indicating a minimum net worth of at least Ten Thousand Dollars ($10,000.00). The compiled financial statement must be prepared in accordance with generally accepted accounting principles by a certified public accountant or public accountant dated not earlier than twelve (12) months prior to the date of the application. and a copy of the same must be furnished to the Commission along with any changes to the statement. Authority: T.C.A and Rule Inspection of Business Records is amended by deleting the text of the rule in its entirety and by substituting instead the following language so that, as amended the rule shall read as follows: Rule Inspection of Business Records. (1) All persons licensed by the Commission shall make available for inspection during normal business hours by the Commission or its duly authorized representative, all books, records and other memorandums of all transactions, transfers and/or sales of motor vehicles, and dead files (any paperwork from an SS-7039 (July 2010) 3 RDA 1693

22 uncompleted deal where a credit application IS received or a buyer's/purchase order is prepared). (2) All records shall be kept on site or at a location where the records can be accessed in a reasonable amount of time. Proof of ownership and consignment agreements of each motor vehicle possessed shall be maintained at the location of the dealership or at a dealership which owns the licensee. Temporary tag logs shall be kept at the dealership of the licensee to which the tags were issued. Records may be kept in written or electronic format. (3) All business records shall be kept for the period of time required by state or federal law or regulation. Authority: T.C.A Rule License Fees is amended by deleting the text of the rule in its entirety and by substituting instead the following language so that, as amended the rule shall read as follows: Rule License Fees. (1) The biennial license fees for licenses issued and renewed and other related fees shall be as follows: (a) For each manufacturer, distributor, factory branch, distributor branch, one thousand six hundred dollars ($1,600.00); (b) For each manufacturer, distributor, fifty dollars ($50.00) per franchised dealer in Tennessee; (c) For each motor vehicle dealer selling new or used motor vehicles, four hundred dollars ($400.00); (d) For each factory representative or distributor representative, four hundred dollars ($400.00); (e) For each motor vehicle sa~esman salesperson, thirty-five dollars ($35.00); (f) For each application for endorsement of change of employer of a motor vehicle sa1e-sffiafl salesperson by an employer, thirty-five dollars ($35.00); (g) For each automotive dismantler and recycler, four hundred dollars ($400.00); (h) For each automobile auction, eight hundred dollars ($800.00); (i) For each motor vehicle show permit, two hundred dollars ($200.00); (j) For each duplicate license, twenty-five dollars ($25.00); (k) For each name change, including additional line-make, four hundred dollars ($400.00); (I) A four hundred dollar ($400.00) fee will be assessed per re inspection of an applicant when re ~--ttoo-i-s-re essitated by an action or inaetion of the applicant; E.QIJ~.Q.G1L~JJ1QJn.Q.tiY~..rrtQ.91li1Y dealer, four hundred dollars ($400.00); (m) T1/v'enty five percent (25%) of alllicensfr-application fees will be forfeited if the applicant fails to submit all required documeflt-attoo-wttrun ninety (90) days of receipt of the application. Documents v/ill be returned to the applicant after ninety (90) days from the initial receipt. 8JQ.!Kl1YJ1Qr~.Q.J:j.911 f.j$4qq.0q) f~_~_w.ilj.j2~~l.~~~_ _~.~~:tp.~j.._r~::iji p_~.gtiq.n...9.l~_n...prlig_ nt_w..b_~d.r.~_jn R~.GJ.LQ..rJ _i _H~.G~$_ jl~1.~_~l _9Y _.rlac1iq.n or inaction of the applicant; (n) I~~I}1Y.:fL'{~_~fl[G _t,3jj.tj2.q_%_} _Qt~JlJiG~.n.~_..~_RR!j_g.~HQ.o_J~~.$..'#itL~~.JQ.d~.il~~L j tt.h.~_?rri1g~!nlj~jj...19_. $J:J._QDJJ1 all required documentation within ninety (90) days of receipt of the application. Any applicant refund my$t _Q~...r~gq.~_.t.~Qinwri.tin.9.,.o.Q.g.~.m.~.oJ _. W.iJJ....9JLL~JYrJl~9.JQ.J.b.~...f.1J2PHG.g..ot~f1~r.JJ.in~1y_'(9_Q)..!;tgy. J.rgm tl1.~li.dj.tj~.lr~g~ipt Authority: T.C.A , , and (July 2010) 4 RDA 1693

23 Rule Motor Vehicle Dealer Shows is amended by deleting the text of the rule in its entirety and by substituting instead the following language so that, as amended, the rule shall read as follows: Rule Motor Vehicle Dealer Shows. (1) A motor vehicle show is any display, except as provided herein below, of motor vehicles by one or more manufacturers, distributors, or motor vehicle dealers. (2) A motor vehicle show permit must be obtained from the Motor Vehicle Commission by the sponsor or promoter thereof no later than ten (10) days prior to the commencement of the motor vehicle show. The permit, or copy thereof, shall be prominently displayed at any entrance into the motor vehicle show. (3) A motor vehicle show permit shall be OOG valid for seven (7) consecutive days and may be renewed one (1) time7 for an additional seven (7) consecutive days. Any such renewal shall begin the day after the ~xp i ration of the original permit. A sponsor or promoter may obtain only one motor vehicle show permit and renewal per calendar year for the same location. (4) The applicant shall provide to the Commission the names and addresses of each manufacturer, distributor or motor vehicle dealer displaying motor vehicles at the show. (5) The sales price of each motor vehicle displayed at the show shall be prominently displayed with the vehicle. Any warranty information associated with the vehicle must be available upon request. (6) Any manufacturer, distributor, motor vehicle dealer or other person displaying motor vehicles at the motor vehicle show shall have a representative present at all times during the motor vehicle show. (7) No sales, or negotiations leading to the sale, of motor vehicles, other than non-motorized camping trailers and travel trailers as provided by T.C.A. Title 55, Chapter 17 et seq., may take place at the motor vehicle show. (8) A manufacturer, distributor, or motor vehicle dealer may display at a single location without obtaining a motor vehicle show permit, provided that no representatives of the displayer are present and that no sales solicitations or activities take place, at the following locations: (a) The interior common areas of shopping malls, hotels or convention centers; (b) The interior of wholesale shopping clubs; (c) County, regional or state fairs; (d) Agricultural events and educational demonstrations; (e) Sporting and entertainment events in conjunction with the sponsorship thereof; (f) Commercial airport terminals. Authority: T.C.A Rule Motor Vehicle Dealer Facilities is amended by deleting the text of the rule in its entirety and by substituting instead the following language so that, as amended, the rule shall read as follows: Rule Motor Vehicle Dealer Facilities. (1) The facility must be physically separate and apart from any other businesses and shall not include any private residence, tent or temporary stand. The facility may be connected to another business facility provided there is a permanent wall from floor to ceiling between the two businesses and the motor vehicle facility has a separate outside entrance and exit. Any doors between the businesses shall be permanently sealed. SS-7039 (July 2010) 5 RDA 1693

24 (2) The facility shall contain adequate office space (a minimum of 288 square feet) for processing sales and purchases of motor vehicles. The facility shall also contain restroom accommodations. (3) The facility shall have a primary telephone number listed in the local directory under the name of the dealership. Mobile and/or cellular telephones are not acceptable as the primary business telephone. The primary phone number of the dealership shall be posted either on the door to the dealership, in a window of the dealership or on the dealership's sign. (4) The facility shall have immediate and contiguous access to and exclusive dedicated use of a motor vehicle storage or display lot capable of accommodating fifteen (15) motor vehicles of the dealership's product line. A lot shall consist of compacted gravel, chert, stone or similar materials and shall not include public lands, unimproved land or residential driveways. The facility shall also contain a minimum of three (3) parking spots dedicated for customer parking. (5) The facility shall be used exclusively for buying, selling, renting, displaying, advertising, demonstrating, servicing or repairing motor vehicles or selling functional or nonfunctional parts, including accessories, safety equipment and vehicle branded clothing. Authority: T.C.A and Chapter Automotive Mobility Dealers New Rules Table of Contents Sales Tax Identification Number City and County Business License Liability Insurance and Worker's Compensation Primary Business Activity Signs Automotive Mobility Dealer Facilities Reasonable Business Hours Automotive Mobility Dealer Applications and Requirements Denial, Suspension or Revocation of License Sales Tax Identification Number. All automotive mobility dealers shall obtain and hold a current sales tax identification number indicating their business as that of an automotive mobility dealer. Upon expiration of a sales tax identification number. the licensee shall either cease business operations. or provide evidence of a valid sales tax identification number. The automotive mobility dealer license shall be invalid during the period of time without a sales tax identification number. Authority: T.C.A , and City and County Business License. All automotive mobility dealers shall obtain and hold a current city and county business license indicating their business as that of an automotive mobility dealer. Upon expiration of a business license. the licensee shall either cease business operations, or provide evidence of a valid business license. The automotive mobility dealer's license shall be invalid during the period of time without a valid business license. Authority: T.C.A , and Liability Insurance and Worker's Compensation. SS-7039 (July 2010) 6 RDA 1693

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